The state is accelerating plans to find a private developer to build a multimillion-dollar cold storage warehouse on Portland’s waterfront, a move seen as critical to support Maine’s growing food production industry.

The Maine Department of Transportation is close to hiring a national expert in cold storage design to help the state find an investor to develop the facility on a site adjacent to the city’s container terminal on Commercial Street, said Robert Elder, director of the Office of Freight Transportation and Business Services.

Momentum for the plan got a boost at last week’s international seafood show in Boston, where Gov. Paul LePage and other state officials heard from wholesalers, processors and potential investors who want to see the facility built, Elder said. State officials will meet on Monday to discuss the project and develop a work plan.

Elder said the continued growth of Eimskip, an Icelandic container line that moved its North American operations from Norfolk, Virginia, to Portland two years ago, has convinced state officials that there’s enough demand for cold storage space to support building a 100,000-square-foot, state-of-the-art facility. Such a warehouse could cost more than $20 million.

“There’s market demand” for the warehouse, Elder said. “We have had a couple of years of success, and people have been watching us. Portland and the Maine Port Authority have some credibility on delivering what the market needs.”

Eimskip primarily ships frozen and chilled fish to the United States from Newfoundland, Iceland and northern Europe. It also ships food products, including frozen lobster, from Maine to Europe.

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Eimskip saw its business grow in Portland from 5,000 containers in 2013 to 6,200 in 2014. The company estimates it will move 7,500 containers through the port this year. Because there is not enough suitable cold storage facility in the area, Eimskip now ships much of its frozen fish to cold storage warehouses in Massachusetts.

Americold offers cold storage at its 150,000-square-foot warehouse on Read Street, but isn’t modern enough, said Larus Isfeld, managing director of Eimskip USA Inc., who added that many of Eimskip’s customers want their cargo stored at a modern facility.

Portland is trying to sell itself as a hub of food production, which includes agriculture and seafood. The city ranks 12th in the nation in food production and 36th in specialty food production in terms of the percentage of jobs in those sectors compared to the total workforce.

But food companies need access to a modern cold storage warehouse to be competitive, Isfeld said.

“If cold storage is not in the area, the food service company will probably position itself somewhere else,” he said.

He said it’s too early to say whether Eimskip, which operates a large cold storage warehouse in Reykjavík, Iceland, will bid on developing the Portland facility.

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Although demand for cold storage facilities is high, they are expensive to build, costing an average of $150-$170 per square foot compared to $50-$65 per square foot for conventional warehouse space, according to a 2014 report by JLL, a financial and professional services firm specializing in commercial real estate services.

The state’s plan is to prepare the West Commercial Street site for development and then offer a long-term lease to a company that would build, operate and own the warehouse, according to John Henshaw, executive director of the Maine Port Authority, which manages the city-owned International Marine Terminal.

The warehouse would be built on 4 acres of land now owned by Unitil and located just west of the Casco Bay Bridge. A tenant, NGL Supply Terminal Co., now operates a liquid propane terminal on half the site.

The state is in the process of acquiring the land from Unitil and plans to pay the cost of moving NGL to a rail yard in South Portland. The propane company last month presented its plans to the city of South Portland, which are under review.

The cold storage warehouse is part of a larger plan to expand the 14-acre International Marine Terminal to include about 12 acres on the west side of the Casco Bay Bridge, plus a 5-acre strip that would serve as a rail corridor. The project will provide more space to store and move containers, and also allow containers for the first time to be placed on trains within the terminal.

The state so far has spent $7.2 million on land acquisition and has awarded Shaw Brothers Construction an $8.6 million contract to expand the facility. This is “Phase 1” of the expansion project, which is scheduled to be completed this summer.

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The development of the cold storage facility is “Phase 2.” Elder would not disclose the price the state is paying for the Unitil land, explaining that the sale is not complete. According to the Department of Transportation’s work plan, $4 million has been set aside for Phase 2. Elder said land acquisition costs make up only a portion of the $4 million.

Henshaw said the state will ask qualified bidders to respond to a request for proposals. He said the state already has access to a lot of information about the property, so engineers can start planning work on the site now and won’t need to wait for NGL to move.

Elder said he’d like see the request for proposals issued early enough in 2016 so a developer could start construction that year.

A big unknown, though, is the amount of time it will take for NGL to get permission from South Portland to built a new terminal in Rigby Yard, Henshaw said.

“We’d definitely like to see them move this year if possible,” he said.


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